Economic policy

In fourth place with about 10% of the vote was the current prime minister - the free market, fiscally responsible (ie pro-austerity) Mario Monti.

In third place, winning about a quarter of the vote, is the completely insurgent Five Star party of the foul-mouthed stand up comic Beppe Grillo. He cannot stand for parliament himself because of a manslaugher conviction dating from 1981.

In second place with about 29.2% of the vote is Silvio Berlusconi's centre right coalition. Sex scandals, dodgy business deals and a record of policy failure in government haven't prevented Mr Berlusconi from winning three times as many votes as the markets' favourite candidate, Mr Monti.

And in first place, by the narrowest of margins, is a centre left bloc. Pier Luigi Bersani's left-leaning parties won 29.5%.

If Moody's downgraded Britain they and international markets are going to love this.

...Neither the Democrat-controlled Senate nor the Republican-controlled House can currently agree a plan that can pass their own chamber - let alone both chambers. Technically both sides have outline* deals but the Republicans want as many spending cuts as tax rises in their proposed package. Obama and the Democrats want $300billion more in tax increases than spending cuts. See this graphic.

Where is public opinion? While the Washington Post concludes that all
of the nation's politicians will lose the little esteem they have left
if they can't reach any agreement most think - correctly - that the GOP
has more at stake. The vast majority of Americans tell pollsters that they want politicians to compromise in the stalled negotiations to avert the fiscal cliff. Starbucks USA is even encouraging its customers to scrawl 'come together' on its red cups as a small encouragement to bipartisanship. Key findings from the latest Gallup poll are...

I identified at least four big ideas from reading the series and those four ideas seem relevant to conservative parties across the world...

EMBRACE STRONG GOVERNMENT (NOT BIG GOVERNMENT)

Olympia Snowe took on the anti-government mentality of some Republicans (a theme of John Key's recent big speech). We need, she wrote, "a government that’s more efficient and effective rather than one that’s simply eviscerated... there is a legitimate role for government to help maximise individual initiative and potential... our message to Americans must not be “you’re on your own” – but that government should foster an environment in which personal opportunity can flourish."

"Greece is in denial. It rejects austerity, but insists on keeping the euro. All the main parties duly parroted what the voters wanted to hear, making for a fantasy election, a make-believe election, a fingers-in-my-ears-I-can't-hear-you election. The only list which was honest about the necessary cuts – a coalition of three liberal parties – failed to gain a single seat."

9.15pm

ND leader Samaras says he has spoken to 'many' European leaders tonight and will speak to more #Greece2012

"Today the Greek people expressed their will to stay anchored with the Euro, remain an integral part of the Euro Zone, honor the country's commitments and foster growth. This is a victory for all Europe. I call upon all political parties that share those objectives to join forces and form a stable new government. I will make sure that the sacrifices of the Greek people will bring the country back to prosperity."

7.45pm

Greece: SYRIZA party says will not take part in a government that supports an EU/IMF bailout - Reuters

7pm The BBC has a good background Q&A explaining what a win for Syriza means in real teams:

"If anti-austerity parties manage to form a cabinet led by Syriza, the new government may refuse to honour the cost-cutting measures its predecessor agreed with Brussels. Greece could find itself out of the eurozone and reintroducing the drachma. Analysts predict a dramatic devaluation of the new currency, accompanied by rapid inflation and business failures. However, some think this would give Greece the chance to rebuild its economy from a position of greater competitiveness."

6.45pm As the Greek election results begin to come in - election results which may decide the fate of the €uro - we'll have a rolling blog/open thread on the night's results and reaction to them, starting with Douglas Carswell MP, who says...

Syriza or no Syriza, Greek poll won't change laws of maths. Greece is still going to default on its debts. The sooner, the better

There are two important US-related pieces of news overnight. First is that another very senior leader of al-Qeada has been killed by a drone strike. It has been one of the strengths of the Obama presidency that he has continued to take the fight to Osama bin Laden's terrorist network and is succeeding in systematically dismantling it. My hunch, however, is that this development - just like the killing of OBL himself - will not decide whether America's 44th president is re-elected. Jobs and budgetary policies will be the determining factor. That brings us to the second piece of news.

Wisconsin's Republican Governor, Scott Walker, has survived an attempt to oust him from office. Indications are that he'll be re-elected with a bigger margin than when he was first given the job of Governor at the very start of last year. Once in office Governor Walker wasted no time and immediately set about stripping public sector unions of collective bargaining rights and forcing public sector unions to make more of a contribution to the various benefits they were receiving - benefits more generous than enjoyed by average private sector taxpayers and which were bankrupting the state. Unions went crazy. Occupying the state house for weeks on end.

Walker's reforms have been hugely successful from a fiscal point of view, however. He has balanced Wisconsin's books without raising taxes and has become a conservative hero. At the same time he became a villain for Democrats and for public sector unions, in particular. America's Left launched a recall campaign to remove him from office in the hope that (a) they could force him out of office and (b) they would discourage any other legislator in any other part of the country from imitating his reforms.

Last night the unions' gambled failed. Earlier this year they won enough signatures for a recall ballot but that ballot took place yesterday and Scott Walker was beating his Democrat opponent by 54% to 45.5% with 93% of votes counted. He told an ecstatic crowd at his victory party that "we can tell Wisconsin, we tell our country, and we tell people all around the globe that voters really do want leaders who stand up and make the tough decisions."

Regrettably, Mitt Romney failed to appear in Wisconsin during the recall campaign but immediately seized on the result as a sign that Americans are willing to vote for fiscal conservatism. "Tonight's results," he said, "will echo beyond the borders of Wisconsin. Governor Walker has shown that citizens and taxpayers can fight back – and prevail – against the runaway government costs imposed by labor bosses." The victory will also produce practical advantages for Romney. Wisconsin is a Democrat-leaning electorate and it is hard to see how Obama can keep the White House without it. Scott Walker has built an exceptionally good ground operation in the state and Romney should be able to utilise this - as well as a fired-up GOP base - in November. Romney also has a new issue - in public sector unions.

At The Weekly Standard Jay Cost correctly sees the battle as a battle about a union movement that has lost its founding purpose:

"The old craft and industrial unions had a stake in the private economy: the faster it grew, the more workers were needed, and the more money everybody made. However, that is not how public sector unionism works at all. In fact, the interest of the public sector unions is not in growing the private economy, but of socializing an ever-greater portion of the national wealth. And these unions have a decidedly clientelistic relationship with the Democratic party. They provide money for the campaign in exchange for special benefits after the election. In 2010, public sector unions (notably AFSCME, the AFT, and the NEA) chipped in $28 million to the Democratic effort; that's almost a third of the total money Democrats received from organized labor, and it does not count the value of their formal endorsements of Democratic candidates or their GOTV volunteers."

The same is, of course, true in Britain except more so. Our state is even bigger than America's and Labour's dependence on union money much greater than is true for Obama's Democrats.

Walker won, concludes National Review, because he represented the taxpayer "while his opponent represented the groups whose livelihoods depend on bilking the taxpayer". The other three ingredients of Walker's success were straight-talking, fast action and - typically for America - a lot of campaign funds. An awful lot.

This is one battle only. Public sector unions have successfully defended their privileges in other key US states - not least against the Republicans' reform-minded Governor of Ohio. Nonetheless Republicans have a smile on their face this morning and rightly so.

The Wall Street Journal warns it readers not to get excited about the result. Before 2005 NRW was a stronghold of the opposition SPD, it says. It also notes that, unlike in France, the big German parties are largely agreed about the need for some sort of austerity (although they're not agreed on pace and scale).

I'm not saying that voters aren't also protesting against spending cuts but we know in Britain that it's been tax rises (on VAT, pasties, charities, pensioners) that have caused Cameron and Osborne their biggest political problems. Deeper cuts in spending aren't going to be popular (think of a one billion spending cut as equivalent to taking £1,000 off one million people) but one way in which centre right parties might protect themselves from the anti-incumbency mood is to limit the tax rises and focus on trimming the EU's bloated public sectors. As John Redwood has argued, we are at the tax saturation point and voters have had enough.

BIFF! France has elected a Socialist president on a massive turnout (81.5% certainly shames Britain) - ending Nicolas Sarkozy's rule and also ending a run of right-of-centre victories across Europe. Some say '75% tax-rate Hollande' will be more moderate than on the campaign trail but IDS has warned of a exodus of French entrepreneurs quitting Paris for London. The Socialist candidate wants to re-negotiate the fiscal pact to place more emphasis on growth.

KA-POW! But will France provide the most important election of the day? Greece has also voted and the ruling coalition parties have suffered slumps in support. Anti-austerity parties have prospered in their place. It is far from clear that a stable coalition can emerge from the election outcome and form a government that is able to fulfil commitments made to the IMF.

DING-DING! Two weeks ago the Dutch coalition also collapsed after Geert Wilders looked at opinion polls opposing further EU-mandated spending cuts and withdrew his support from Mark Rutte's minority administration.

BOOM! Unemployment among Spain's youth hit 51.1% earlier this week. 17.4 million people are now out-of-work across the Eurozone.

While the UK media has been obsessing about the Leveson Inquiry the European continent has been denying the two most touted solutions to its economic problems - austerity or, my favoured solution, the break-up of the single currency area. The next few days and weeks might be very crunchy.

Commenting on the US debt ceiling debate Vince Cable has described the US Republicans as behaving like "right-wing nutters". Ryan Streeter of ConservativeHomeUSA explains why John Boehner and other Republicans have decided to play hardball with the high-spending President Obama.

The debate raging in Washington over America’s debt ceiling has generated a flurry of competing claims about America’s fiscal condition and what to do about it. The debate is as thick as the swampy summer air of America’s capital city.

In reality, though, the main terms of the debate – and what is at stake – are pretty straightforward.

The United States has a statutory cap on its public debt, currently at about $14 trillion. The debt ceiling can only be raised by passing a new law. This has been done multiple times over the past few decades with little fanfare. But this time Republicans are using the vote to try and force the White House to be more fiscally responsible. Sajid Javid MP has advocated a ceiling for UK debt so a cap is also put on the ability of British politicians to secretly borrow more and more.

The overall rate of unemployment in Spain is 21%. It's 45% for young people. Both add up to a deadly recipe for political unrest.

The first pointers to that unrest are now clear.

One pointer came yesterday when the ruling socialist government was hammered in municipal and regional elections. Prime Minister Zapatero's austerity measures may have been praised by international observers but many of the trade unions and public sector interests have walked away from his party in protest. The opposition Popular Party triumphed in all of the thirteen regional governments being contested, winning 38% of the overall vote - against just 28% for the socialists. The PP of Mariano Rajoy (pictured) ousted the socialists from Castilla-La Mancha for the first time ever and also the left-wing strongholds of Barcelona and Seville. The conservatives have promised, as first steps, to audit the books of these regional governments. These audits are expected to show that the fiscal position of the Spanish state is much worse than has been so far declared.

The most vivid sign of the explosive nature of Spanish politics can be seen in Puerta del Sol, in the centre of Madrid. Thousands of young Spaniards turned the huge square into a tent city about ten days ago.

The so far peaceful protests have caught the imagination of Spain and, via social media, copy cat protests have spread across the whole nation with 50,000 or more young people camping out in town squares, protesting at what are the worst unemployment rates in the €urozone. Although most of the protestors simply want work they have become attached to radical student movements that seek deep cuts in military spending, the closure of nuclear power plants and freedom for digital pirates.

The PP would - if elected in next year's general election - be likely to continue both Zapatero's austerity measures and his support for Spain's continued membership of the single currency.